What's Trending in Managed Futures

Strategy Background

Managed futures strategies, defined as systematic, trend-following funds managed by Commodity Trading Advisors (CTAs), have delivered compelling risk-adjusted returns in the alternatives investment strategy universe through the first half of 2026. The sustained directional moves due to the AI-driven equity rally, Middle East conflict, and stickier inflation have combined to deliver a diversified long/ short trading environment across asset classes. For comparison, a market with limited meaningful trends across asset classes and marked by consistent reversals is often a worse case scenario for the average medium-term trend-follower.

Current Positioning

As of the beginning of June, the managed futures industry has built up several noteworthy positions that current investors should be monitoring:

Equities: Long — But Asymmetrically Risky

Trend-following funds remain net long global equities, with the AI-driven rally in the U.S. driving much of the recent increase in long exposure. The near-term outlook for equity positioning carries notable asymmetry, as a sustained market decline could trigger significant selling pressure, and potentially amplify any drawdown.

Commodities: Energy Trends Continue

Long oil and gold have been the main contributors to returns, however, both markets have declined from recent highs; with gold experiencing a significant move down after briefly breaking through the $5,000 level. Elevated geopolitical risk premiums, central bank demand, dollar weakness, and rising fiscal deficit concerns all provided fundamental tailwinds to the technical trend. A sustained trend across several futures contracts in this sector would provide an attractive source of diversification from the trends in the equity and bond markets.

Fixed Income: Short and Building

There has been a consistent build-up in short bond exposure over the course of the year, as inflation remains above target and any thought of a rate cut has shifted to a rate hike. This is a meaningful change in positioning from where most trend-followers entered the year, and it reflects the degree to which the macro narrative has repriced.

Currencies: Mixed U.S. Dollar Signals

In currencies, trend-following strategies have maintained a short U.S. dollar bias, though the strength of that trend has begun to soften. Long positions in the Australian dollar and Mexican peso versus the dollar have been profitable, while the one consistent long U.S. dollar exposure has been against the yen. The dollar weakness theme has been supported by a combination of fiscal deficit concerns, tariff uncertainty, and a relative growth deceleration narrative that gained traction in Q1 and early Q2. However, with U.S. inflation remaining sticky at elevated levels and the Federal Reserve increasingly hawkish, a dollar stabilization, or partial reversal, is a credible scenario that could pressure the current short book. Currency trend signals tend to be among the slower-moving in a managed futures portfolio, meaning a meaningful shift in dollar direction would take time to generate a signal flip, but investors should be alert to a potential squeeze if the macro backdrop shifts abruptly.

LPL Research Takeaway

Managed futures have offered persistent, cross-asset trends, providing diversification, and delivering compelling returns amid macro uncertainty. The risks, including trend reversals, crowded equities, and potential regime shifts, should be watched as we enter the second half of the year and warrant position-sizing discipline.

As always with systematic strategies, discipline comes not from predicting when trends will end, but from ensuring that risk management frameworks are robust enough to capture the reversal signal without giving back an outsized portion of the gains. We continue to view managed futures as a core diversifier within a well-constructed alternatives sleeve, and the 2026 environment has reinforced rather than undermined that view.